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Information Technology and the Future of Cities

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  • Jess Gaspar
  • Edward L. Glaeser

Abstract

Will improvements in information technology eliminate face-to- face interactions and make cities obsolete? In this paper, we present a model where individuals make contacts and choose whether to use electronic or face-to-face meetings in their interactions. Cities are modeled as a means of reducing the fixed travel costs involved in face-to-face interactions. When telecommunications technology improves, there are two opposing effects on cities and face-to-face interactions: some relationships that used to be face-to-face will be done electronically (an intuitive substitution effect), and some individuals will choose to make more contacts, many of which result in face-to-face interactions. Our empirical work suggests that telecommunications may be a complement, or at least not a strong substitute for cities and face-to-face interactions. We also present simple models of learning in person, from a written source, or over the phone, and find that interactive communication dominates other forms of learning when ideas are complicated.

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Paper provided by Harvard - Institute of Economic Research in its series Harvard Institute of Economic Research Working Papers with number 1756.

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Date of creation: 1996
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Handle: RePEc:fth:harver:1756

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  1. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-58, December.
  2. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," NBER Working Papers 3993, National Bureau of Economic Research, Inc.
  3. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October.
  4. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  5. Ota, Mitsuru & Fujita, Masahisa, 1993. "Communication technologies and spatial organization of multi-unit firms in metropolitan areas," Regional Science and Urban Economics, Elsevier, vol. 23(6), pages 695-729, December.
  6. Glaeser, Edward L & Mare, David C, 2001. "Cities and Skills," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 316-42, April.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Face to Face Contact and the Internet are Complements: The Case of Brazil's Carnival
    by Matthew E. Kahn in Environmental and Urban Economics on 2012-02-18 15:12:00
  2. Are Cities and the Internet Complements or Substitutes?
    by Matthew E. Kahn in Environmental and Urban Economics on 2012-05-28 15:20:00
  3. How Will Participating Universities Make $ From Offering Free Web Courses on Coursera?
    by Matthew Kahn in Environmental and Urban Economics on 2012-07-20 13:40:00
  4. Amazon Fresh and the Rise of the Consumer City
    by Matthew Kahn in Environmental and Urban Economics on 2013-07-31 02:37:00
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